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Politics : Rat's Nest - Chronicles of Collapse
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To: Wharf Rat who wrote (5637)3/19/2007 7:29:54 AM
From: Wharf Rat  Read Replies (1) of 24223
 
Saudi production laid bare
Posted by Euan Mearns on March 19, 2007 - 2:00am


A couple of weeks ago I made a comment saying that we needed data on producing wells and drilling history in order to further analyse Saudi oil production. In answer to my wish Kyle posted a comment with this link to the OPEC Annual Statistical Bulletin which contains all this information - well almost.

So is Saudi production about to nosedive?

Figure 1 Saudi Arabian average oil production per well. The average well flow rates are drifting down slowly from just above 6000 bpd in 1991 to just below 6000 bpd in 2005. No sign of a pending nosedive here!

Background
This is the fourth article on Saudi Arabia in this recent series on The Oil Drum. Stuart Staniford set the ball rolling with his post:

Saudi Arabian oil declines 8% in 2006
I responded with:

Saudi Arabia and that $1000 bet
To which Stuart replied with:

A nosedive toward the desert
There's nothing like a good controversy to stimulate research. But where does the truth lie?

Stuart's position Oil production peaked in Saudi Arabia in 2005. Recent sharp declines in production are involuntary and Saudi Arabia has switched from swing producer to supply constrained producer.
My position Sharp falls in Saudi production since April 2006 are in part voluntary achieved by retiring wells. I say "in part voluntary" because it seems likely that the Saudis will welcome the chance to rest wells with high water cut or low reservoir pressure. When called upon to do so, I believe Saudi Arabia will increase future production through bringing wells out of retirement and a rolling program of drilling new wells.
This post looks in detail at the drilling and production record of Saudi Aramco since 1980.
Summary
Cross checking OPEC production and rig count data with International Energy Agency (IEA) and Baker Hughes data shows excellent agreement suggesting there is no reason to doubt the reliability of the OPEC data source.
In 2005, Saudi Arabia had 1923 producing wells that on average produced 5740 barrels oil per day per well. This is astonishing high well productivity for an area that has been producing oil for over 50 years.
The average well productivity has drifted down from just above 6000 bpd in 1991 to just below 6000 bpd in 2005 (Figure 1). There is no sign of a looming productivity crisis in these data and it would appear that increasing production may be achieved quite simply by drilling more wells.
The data provide insight into Saudi Aramco reservoir and resource management in relation to their roll as swing producer. In the past, production has been reduced by retiring production wells and raised again by bringing wells out of retirement. All the while, Aramco have a rolling program of drilling new wells thereby increasing the total number of wells that are available for production.
In my post of 7th March I suggested that the most likely explanation for falling Saudi production since April 2006 was voluntary restraint executed through a program of resting wells with high water cut or low pressure. The data presented here contain no evidence of a pending production crisis and voluntary restraint is still considered to be the most likely explanation for recent falls in Saudi production.

europe.theoildrum.com
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